What Is the Best Free Credit Report Service?
A credit score (also known as your credit rating) is a three- digit number that indicates your creditworthiness.
Credit scores can range between 300 to 850. A credit score of 300 is the worst possible credit score and 850 is the best credit score you can have.
Mortgage lenders, banks, and credit card companies use credit scores to evaluate the lending risk to prospective home buyers and homeowners seeking a new mortgage.
In short, lenders use credit scores to estimate the likelihood that you will repay the loan.
How to get your credit scores for free
Experian, Equifax, and TransUnion offer free credit scores and free credit reports. However, not all credit rating services are created equal — so we ranked them from best to worst.
1. Equifax Core Credit
Equifax offers a nice format, and the site is easy to use. The company's reports and credit scores are updated every 31 days.
Start by creating your myEquifaxTM account. Equifax will ask you the standard identifying questions, including your social security number, address, etc.
After you finish with the identification details, you will see your VantageScore® credit score. The web page will also present you with the pros and cons of the factors affecting your credit score.
Equifax will also display your credit report. The credit report summary includes revolving accounts, mortgage accounts, installment accounts, consumer statements, personal information, inquires, public records, and collections (if applicable).
Equifax will also allow you to freeze your Equifax credit report and allow you to file a credit dispute.
Of course, for a small monthly fee you can also receive daily credit score updates and credit report monitoring. If you're working to improve your credit score, the small monthly fee is worth the cost, because you can see if you're making improvements.
Experian offers a free credit report and a free FICO® Score 8 model (Fair Isaac Corporation). I tried it and found the service exceptional.
The log in requirements was extensive, but it is worth it. Most lenders use FICO® scores for credit decisions. Base FICO® scores (including the FICO® Score 8) range from 300 to 850.
For a fee, Experian can also provide you with monthly 3-bureau FICO® Scores.
Overall, I found the TransUnion unsatisfactory.
I attempted to obtain a free credit score from the TransUnion web site, but if TransUnion provides a free credit score like Equifax and Experian, I couldn't find it. There was a question and answer page regarding the reasons to obtain a free credit report.
FICO vs. VantageScore credit scores
Both companies attempt to predict the applicant's credit risk, and both boil down information derived from the customer's credit report.
You will notice that there is a significant difference between the FICO® and VantageScore® credit scores. Like Heinz and Hunt's ketchup, each company uses different ingredients to come up with their ideal credit score number.
The FICO's industry-specific scores range from 250 to 900, while the base FICO® Scores range from 300 to 850.
Frequently Asked Questions About Credit Scores
Does having two credit cards build credit fast?
According to Experian, having more cards can increase your total available limit and can positively affect credit scores.
However, it's important to keep low balances, approximately 30% or less of the credit card limit. Opening new sources of credit will initially lower your credit scores. By keeping balances low and/or paying off nominal balances each month, the credit scores should increase.
Does paying off all debt increase credit score?
Actually, paying off all debt will decrease your credit score. A better strategy is to pay down the credit balance to 30% of the credit limit. And don't close your accounts. The credit history plays a significant role in the credit score formula.
How many years of credit do I need to buy a house?
The FHA, USDA, VA, and conventional loans are very accommodating with applicants who have a thin (or no) credit history. The FHA loan allows rent receipts, phone bills, and utility statements to establish creditworthiness.
What hurts your credit score the most?
Missing a credit card or loan payment can drastically affect your credit score. Your payment history accounts for 35% of your FICO and Vantage Scores.